Capital, reserves of UAE banks hit $90bln in Q2

The aggregate capital and reserves of banks operating in the UAE increased by 4.4%

  
Image used for illustrative purpose. A view of DIFC gate building.

Image used for illustrative purpose. A view of DIFC gate building.

DIFC/Handout via Thomson Reuters Zawya

The aggregate capital and reserves of banks operating in the UAE increased by 4.4 per cent, reaching Dh330.2 billion ($90 billion) by the end of Q2 2018 compared to a 1.5 per cent increase at the end of the same period of 2017, a media report said.

The total capital adequacy ratio showed an increase of 3.4 per cent during the second quarter of 2018, compared to a decrease of 0.5 per cent during the corresponding period of 2017, reported Emirates news agency, citing statistics from the Central Bank of the UAE.

They continued to remain well above the 12.375 per cent Capital Adequacy Ratio, which includes the 1.875 per cent Capital Conservation Buffer requirement, and 8.5 per cent Tier1 Ratio as prescribed by the CB regulations in compliance to Basel III guidelines, it added.

Banks are following Basel III principles for calculating the Capital Adequacy Ratios effective December 2017 in line with the Guidelines issued by the Central Bank.

Capital adequacy ratios measure the amount of a bank’s capital expressed as a percentage of its risk weighted credit exposures. A high capital adequacy ratio provides protection to depositors and promotes the stability and efficiency of the financial system of an economy.

At the end of the second quarter of 2018 total assets of banks operating in the UAE increased by 1.1 per cent, reaching Dh2748.9 billion, compared to a quarterly increase of 0.2 per cent at the end of the second quarter of 2017. During the period between June 2017 and June 2018, the total assets of banks operating in the UAE increased by 4.4 per cent.

Gross credit also increased by 0.9 per cent at the end of June 2018, reaching Dh1622.3 billion. On an annual basis, gross credit increased by 3.4 per cent.

By the end of the second quarter of 2018, total deposits of resident and non-resident customers with banks operating in the UAE increased by 1.3 per cent, reaching Dh1684.3 billion, compared to a reduction of 0.8 per cent (Dh1589.1 billion) at the end of Q2 of 2017.

Resident deposits increased by 1.4 per cent, amounting to Dh1494.2 billion at the end of the second quarter of 2018, compared to a reduction of 0.3 per cent at the end of the same period of 2017 reaching Dh1409.3 billion. Non-resident deposits decreased by 0.3 per cent to Dh190.1 billion by the end of June 2018, compared to a 4.9 per cent reduction at the end of the same period in 2017.

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